NEC 2008 Annual Report Download

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NEC CORPORATION
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Table of contents

  • Page 1
    AnnuAl RepoRt 2008 Year ended March 31, 2008 NEC CORPORATION

  • Page 2
    ... buSIneSS 24 MobIle/peRSonAl SolutIonS buSIneSS 26 eleCtRon devICeS buSIneSS 28 R&d And IntelleCtuAl ASSetS StRAteGY 32 CoRpoRAte GoveRnAnCe 36 neC'S CoRpoRAte SoCIAl ReSponSIbIlItY 38 FInAnCIAl SeCtIon 101 InveStoR InFoRMAtIon 102 CoRpoRAte oveRvIew CHAnGe In ACCountInG pRInCIpleS NEC changed its...

  • Page 3
    FInAnCIAl HIGHlIGHtS NEC CORPORATION AND CONSOLIDATED SUBSIDIARIES For the years ended March 31, 2006, 2007 and 2008 (Japan GAAp) In millions of yen 2006 2007 2008 In millions of U.S. dollars 2008 Percent change 2008/2007 For the year: Net sales ...Operating income ...Ordinary income ...Net income...

  • Page 4
    MeSSAGe FRoM tHe MAnAGeMent Hajime Sasaki Chairman of the Board kaoru Yano President 02

  • Page 5
    ...developing products and putting in place sales networks. because we have launched many products and solutions ahead of other companies, sales in the nGn-related business in fiscal 2008 were significantly higher than in the previous fiscal year. by restructuring the mobile terminals and semiconductor...

  • Page 6
    InteRvIew wItH tHe pReSIdent neC president kaoru Yano discusses neC's Strategies 04

  • Page 7
    ..., we roughly doubled sales related to the construction of Next Generation Networks (NGNs), which will play a pivotal role in these fields. In addition, NEC implemented growth initiatives such as forming alliances to expand businesses globally and development activities to fortify strategic fields...

  • Page 8
    ...-to-point microwave communication system has already been a major success overseas. Backed by the exceptional manufacturing capabilities of NEC's plant in Fukushima, PASOLINK has earned high marks for its product quality and performance. Sales volumes are growing fast atop strong demand from mobile...

  • Page 9
    ... profitability in the semiconductor and mobile terminals areas. How will you develop these businesses going forward? A: One reason for the semiconductor area's lackluster performance was its large R&D expenses. NEC Electronics Corporation, for example, used to spread its resources thin. However...

  • Page 10
    ...fight against global warming. NEC offers environmental management solutions based on energy-efficient semiconductors, power control software and other advances. We have also decided to start volume production of lithium-ion batteries for automobiles through a joint venture with Nissan Motor Co., Ltd...

  • Page 11
    ... of teamwork. This is essential to realizing the NEC Group Vision 2017 and our corporate philosophy. Because we aim to expand our businesses globally, it is essential for us to sufficiently share a common set of values with employees of overseas subsidiaries. The NEC Group Core Values reflect the...

  • Page 12
    ..., It investment is increasing in growth markets such as the bRICs countries and resource-rich countries. neC is expanding nGn-related businesses in Japan's worldleading nGn market, and aims to extend its It/network Solutions business to overseas markets around the world and thereby accelerate growth...

  • Page 13
    ..., even for mobile phone users, ultra high-speed communications comparable to FttH will soon become a reality. looking at terrestrial tv broadcasting in Japan, digital broadcasting has already got under way, and full digital broadcasting will begin in 2011 when analog tv broadcasting ends. this is...

  • Page 14
    ... on SIp servers, and shared platforms (service platforms) for the delivery of services. this has given neC an advantageous position in business negotiations on nGn construction in Japan. based on experience and expertise gained in the Japanese market, neC will develop business globally going forward...

  • Page 15
    ... developing services using nGns in social infrastructure fields in the public and financial services sectors, as well as electronic money and RFId solutions in the distribution and services fields. As moves to establish nGns and wireless broadband networks get fully under way in global markets, neC...

  • Page 16
    ...It/network Solutions business "iStorage HS Series (HYdRAstor)" this next-generation grid storage system product was developed at neC laboratories America, Inc. "iStorage e1" Released in January 2008, this storage product was jointly developed with eMC Corporation based on a strategic alliance with...

  • Page 17
    ...-generation mobile communications system. Going forward, lte is expected to be adopted by numerous mobile phone service providers in Japan and overseas, including ntt doCoMo, Inc. and verizon Communications Inc. of the u.S. neC will supply products developed by this jointventure company in a timely...

  • Page 18
    ...: driving overseas business expansion (ultra-Compact, point-to-point Microwave wireless Access System) neC's pASolInk is an ultra-compact, high-performance microwave communications system. It is making a substantial contribution to the development of mobile infrastructure all over the world mainly...

  • Page 19
    ...and evolution. As a prime contractor in this project, neC is in charge of the manufacture and operation of kAGuYA under the supervision of the Japan Aerospace exploration Agency (JAXA). neC is playing an important role as a member of this project by handling, for example, the development of on-board...

  • Page 20
    ... systems; and carrier-class reliability developed through experience in both fields of fixed and mobile communications systems. Furthermore, neC has leading-edge technologies in areas of convergence between It and networking. Mobile/personal Solutions business pRopoRtIon oF SAleS (2008) SAleS...

  • Page 21
    ... Communications Service providers N network Infrastructure (Mobile Communications Systems, Fixed-line Communications Systems) N N Maintenance and Support It outsourcing pC Servers unIX Servers Mainframe Computers Supercomputers Storage products business personal Computers professional workstations...

  • Page 22
    ... and support; It products, which consists of servers and other products; network Systems, which involves providing fixedline and mobile communications systems to communications service providers, and network systems for enterprises; and Social Infrastructure, which involves broadcasting, aerospace...

  • Page 23
    ... SYSteM FoR RetuRned bookS (Saitama Municipal Chuou library) in Japan, but also targeting global businesses in Asia and other markets. The alliance covers a broad range of activities from development and marketing of solutions to sales. NEC is actively creating and expanding new markets using...

  • Page 24
    ...of these systems to Daiwa Securities Group Inc.; Sumitomo Trust & Banking Co., Ltd.'s New York Branch; and other customers. In the storage field, we commercialized a nextgeneration grid storage system called the "iStorage HS series (HYDRAstor)." Developed by NEC Laboratories America, Inc., shipments...

  • Page 25
    ... is planned for the end of 2008. NEC is also part of a consortium laying optical submarine cable in Alaska for GCI, a major communications services provider. Regarding the Long Term Evolution (LTE) nextgeneration mobile communications system, for which commercial services are expected to begin...

  • Page 26
    ...a society. the Mobile/personal Solutions business provides the bIGlobe Internet service and these information terminals, and aims to provide even more user-friendly terminals and services going forward. Fiscal 2008 operating Results In fiscal 2008, the year ended March 31, 2008, sales in the Mobile...

  • Page 27
    ..., NEC actively conducted new types of sales promotions, including a promotion tied into a joint cross-media TV drama produced by Nippon Television Network Corporation and an event featuring a live demonstration of new NEC mobile handsets for popular bloggers. enables remote use of a home server pC...

  • Page 28
    ... resources on developing highly competitive products in global markets. NEC consolidated development projects, reallocated employees and bolstered production capabilities. NEC also concentrated business resources on semiconductors for use in automotive equipment, mainly automotive microcontrollers...

  • Page 29
    ... expand the lithium manganate battery business, while strengthening its product portfolio by leveraging NEC's materials development capabilities. * NEC boasts the third largest global market share in the global automotive microprocessor market. (Based on research by NEC Electronics Corporation) For...

  • Page 30
    ... its focus on these fields, NEC aims to develop competitive businesses in global markets and to better fulfill the need for solutions to problems faced by society, such as environmental degradation and security-related issues. Dealing with fast-changing social trends while also staying ahead of...

  • Page 31
    ... Open Innovation, NEC aggressively incorporates knowledge from domestic and overseas universities and research institutions. Measures to bring in knowledge include accepting student trainees under internship programs, carrying out joint research, and inviting researchers from outside the Company...

  • Page 32
    ... information and communication systems with a view to 30 years from now. We are seeking to produce even higher quality research by promoting R&D from a global perspective and Open Innovation. The laboratories will become a base for global, Open Innovation-oriented research and development, which...

  • Page 33
    ...-speed data transfers in the order of 20 terabits*2 a second for every one LSI within a roughly 10 cm2 area on a printed circuit board. This will allow a transmission volume that is approximately 1,000 times larger than that of current industry-standard optical modules. NEC has developed two main...

  • Page 34
    ... officers, executive general managers of business units and other members. This GENERAL MEETING OF SHAREHOLDERS Elect and Dismiss Audit Management/ Supervision CORPORATE AUDITORS (Board of Corporate Auditors) committee deliberates and reports on matters related to the status of the NEC group...

  • Page 35
    ... conducting consistent reviews of this basic policy in response to changes in the business environment. (1) In order to ensure that Directors and employees perform their duties in compliance with laws, regulations, and the Company's Articles of Incorporation, Directors and corporate officers shall...

  • Page 36
    ... and promote more timely decision making and effective performance of duties. The corporate officers shall, under the supervision of the Board of Directors, conduct business efficiently in accordance with medium-term corporate management goals and budgets. (5) In order to ensure that the NEC group...

  • Page 37
    ... Group Inc. Member of the Board President, IPSe Marketing, Inc. Member of the Board Senior Adviser, Sumitomo Corporation Member of the Board Professor, Keio University Graduate School of Media and Governance *1 Outside Directors as stipulated in Item 15 of Article 2 of the Company Law of Japan...

  • Page 38
    ... such as environmental protection and social contribution, with the aim of realizing our Group Vision. "ReAl It Cool pRoJeCt" Formulated to Reduce power Consumption of Customers' It Systems NEC has formulated the "REAL IT COOL PROJECT," a series of programs and activities for the development and...

  • Page 39
    ...to a capacity of roughly 16 times the Tokyo Dome stadium. tree planting on kangaroo Island Having Fun Restoring a natural environment As part of environmental awareness raising activities and the "NEC Make-a-Difference Drive," a community contribution program in which employees participate, NEC has...

  • Page 40
    ...SeleCted FInAnCIAl dAtA 40 MAnAGeMent'S dISCuSSIon And AnAlYSIS 48 ConSolIdAted bAlAnCe SHeetS 50 ConSolIdAted StAteMentS oF opeRAtIonS 52 ConSolIdAted StAteMentS oF CHAnGeS In net ASSetS 54 ConSolIdAted StAteMentS oF CASH FlowS 56 noteS to ConSolIdAted FInAnCIAl StAteMentS 100 RepoRt oF Independent...

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    ... 100-8233, Japan Request forms for change of address, etc. Japan toll free: 0120-175-417 Other inquiries Japan toll free: 0120-176-417 Composition of Shareholders (Percentage of shares (%)) (As of March 31, 2008) Japanese Corporations 36.32% Foreign Investors 25.42% Stock exchange listings and...

  • Page 104
    ...2008) IT/Network Solutions business Mobile/Personal Solutions business Electron Devices business NEC Corporation and consolidated subsidiaries 152,922 (As of March 31, 2008) number of employees organization chart (As of April 1, 2008) Domestic Sales Business Unit International Business Promotion...

  • Page 105
    ... strategies, financial targets, technology, products and services, and business performance of NEC Corporation and its consolidated subsidiaries (collectively "NEC"). Written forward-looking statements may appear in other documents that NEC files with stock exchanges or regulatory authorities, such...

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    7-1, Shiba 5-chome, Minato-ku, Tokyo 108-8001, Japan Telephone: +81-3-3454-1111 NEC home page: http://www.nec.com Investor Relations home page: http://www.nec.co.jp/ir/en ISSN 0910-0229 ©NEC Corporation 2008 Printed in Japan